Elon Musk Settles SEC Lawsuit For Spare Change, Proving Once Again That Rules Are For Other People

from the the-consequence-free-elite dept

There are perks to spending over a quarter of a billion dollars getting your preferred candidate elected. A multi-month free pass to take a sledgehammer to the federal government, for starters. And, apparently, a sweetheart deal when the SEC comes knocking with a lawsuit for which they had you dead to rights.

As you’ll recall, when Elon Musk first started buying up Twitter stock, before he officially decided to buy the whole company, he blew past the SEC-mandated deadline to reveal publicly that he had accumulated over 5% of the stock. Indeed, Musk waited until he held nearly 10% of the company’s stock before revealing his position at all. Many shareholders were rightly pissed off about this, because it likely diminished the value of their shares. There’s a reason the law says you need to disclose crossing that 5% line.

And, to be clear, this isn’t one of those gray areas of the law. This is a case where Elon pretty clearly violated the law in very obvious ways. But because the Biden admin was so terrified of looking even remotely biased against Elon, the SEC took nearly three years investigating the case (and yes, part of that was Elon trying to ignore investigatory demands) before finally suing him… in the last week of the Biden admin.

I’m somewhat amazed it took this long, but earlier this week, the Trump SEC announced a settlement. Despite the blatant flouting of the rules — which likely cost Twitter shareholders millions of dollars — the settlement requires Elon to pay $1.5 million. That’s basically pocket change to the world’s richest man. It’s not even a slap on the wrist, which might sting a bit.

And, of course, plenty of people are noticing what kind of signal this sends during one of the most corrupt US Presidential administrations in history:

“I do think that it suggests if you’re wealthy or powerful enough then there aren’t going to be consequences,” said Fagel, who previously led the SEC’s San Francisco office. “The optics of this are terrible.”

Perhaps in the grand scheme of things this doesn’t much matter. No real fine was going to matter much to Elon Musk. He has enough money to be shielded from effectively any monetary punishment — they could fine him 99% of his wealth and he’d still be richer than basically anyone reading this.

But it’s this kind of thing, and the lack of real consequences for it, that undermine our trust in institutions and the rule of law. The message being sent is hard to miss: if you’re wealthy enough and loyal enough to Trump, the rules simply don’t apply to you.

Filed Under: donald trump, elon musk, sec

Companies: twitter